Weekly Report - 06 December 2018 (WR-18-48)

COSTA RICA: Alvarado claims major victory

President Carlos Alvarado this week was able to point to a historic victory after Costa Rica’s 57-member unicameral legislature approved his government’s tax reform proposal. Addressing the country’s widening fiscal deficit (which closed at 6.2% of GDP in 2017) had been the main priority for Alvarado’s centre-left Partido Acción Ciudadana (PAC) government since he took office in May given mounting domestic and international concern over Costa Rica’s precarious financial situation. His predecessors, Luis Guillermo Solís (PAC, 2014-2018) and Laura Chinchilla (Partido Liberación Nacional [PLN], 2010-2014), had notably both tried and failed to pass a comprehensive tax reform.